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Spotlight on $AYRSF Ayr Strategies A patient undiscovered organic growth monster now pushing full throttle
$MSOS $CRLBF $CURLF $GTBIF $TCNNF $TRSSF
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CEO Jonathan Sandelman has over a 30 year track record in banking and finance and helped build Bank of America's Securities business.
Now runs a family office and came upon the cannabis industry while looking for investments. Deep research led to the enormous opportunity.
Now runs a family office and came upon the cannabis industry while looking for investments. Deep research led to the enormous opportunity.
Watching what happened to companies during Cannabis 1.0 that consisted of easy capital, large land grabs sought with execution risk, significant cash burn, dilution of shareholders and acquiring licenses without operation capabilities caused him to move in the opposite direction
He bought 5 operations across NV and MA and from Day 1 focused on his companies being EBITDA & CF positive.
While companies tried to be the Apple or Amazon of cannabis quickly, he took a step back and focused on developing operational efficiencies and top level talent.
While companies tried to be the Apple or Amazon of cannabis quickly, he took a step back and focused on developing operational efficiencies and top level talent.
The plan was to go DEEP before wide. He saw the exuberance/irrationality in Cannabis 1.0 and decided to sit on hands while growing the 5 businesses. Over inflated assets would crash at some point in the cycle and Ayr would be positioned with profitability and strong balance sheet
Now entering Cannabis 2.0, new investor $ focuses on fundamentals not momentum. Ayr ranks among the highest in FCF, EBITDA and margins giving them the advantage of favorable terms in the capital markets - can NOW scoop up assets of those who over expanded recklessly.
Jonathan faced a lot of criticism for not expanding quickly but if you notice now many of the big MSOs are taking a step back and trying to go DEEP in key markets.
Ayr already went DEEP and can now plug and play with operational efficiencies that are the envy of the industry.
Ayr already went DEEP and can now plug and play with operational efficiencies that are the envy of the industry.
Overview in NV:
5 Dispensaries - all doing over $20M run rate. Before acquired by Ayr only did $13-14M. Henderson, NV dispensary did over $3M in July and $35M+ run rate (!)
53k Sq ft cultivation with add'l 20k sq ft capacity
2 add'l disp. licenses (one more in Henderson!)
5 Dispensaries - all doing over $20M run rate. Before acquired by Ayr only did $13-14M. Henderson, NV dispensary did over $3M in July and $35M+ run rate (!)
53k Sq ft cultivation with add'l 20k sq ft capacity
2 add'l disp. licenses (one more in Henderson!)
The Nevada dispensaries were acquired in May 2019 and Ayr spent 12 months increasing efficiencies and profitability. Focuses on locals and building customer loyalty.
They went from ~4,500k transactions a day to over ~6,300k currently ON THE SAME ASSET BASE!
They went from ~4,500k transactions a day to over ~6,300k currently ON THE SAME ASSET BASE!
Overview of MA:
Doubled cultivation from 13k sqft to 32k sqft in Mar/Apr 2020 (covid) and came online this year. Mass state sales halted in most Q2 and expanded capacity will bear fruit in Q3 on.
4 medical dispensaries in Greater Boston on $11M run rate! Will convert to adult use
Doubled cultivation from 13k sqft to 32k sqft in Mar/Apr 2020 (covid) and came online this year. Mass state sales halted in most Q2 and expanded capacity will bear fruit in Q3 on.
4 medical dispensaries in Greater Boston on $11M run rate! Will convert to adult use
Mass. wholesale business now doing over $5.5M/month
Prior to this months acquisitions, all of Ayr's growth QoQ has been ORGANIC in NV and MA and on the same asset base. Remarkable.
Now they enter PA/OH...
Prior to this months acquisitions, all of Ayr's growth QoQ has been ORGANIC in NV and MA and on the same asset base. Remarkable.
Now they enter PA/OH...
Assets acquired in PA/OH:
6 licenses for PA dispensaries (pitt, Philadelphia focused)
180k sqft cultivation capacity built in phases (38.4k operational) and Phase 1 completed soon and first flower sale in Q12021.
58k sqft OH cultivation under construction, 9k sqft operational
6 licenses for PA dispensaries (pitt, Philadelphia focused)
180k sqft cultivation capacity built in phases (38.4k operational) and Phase 1 completed soon and first flower sale in Q12021.
58k sqft OH cultivation under construction, 9k sqft operational
PA/OH deals w/ favorable terms and minimal shareholder dilution with quick accretion and access to the PA medical market currently with a 2.5% penetration rate (4x Mass.)
Ayr has one of the tightest fully diluted share structures and lowest floats in the industry.
Ayr has one of the tightest fully diluted share structures and lowest floats in the industry.
July Revenue of $15.1M, 60.8% gross margin and $6.4M in Adj EBITDA.
Annual run rate of $181M revenue and $77M EBITDA.
Generated $8.7M in cash flow in Q2 and Cash balance healthy at $17M.
*ALL OF THIS BEFORE ANY REVENUE FROM PA/OH*
Annual run rate of $181M revenue and $77M EBITDA.
Generated $8.7M in cash flow in Q2 and Cash balance healthy at $17M.
*ALL OF THIS BEFORE ANY REVENUE FROM PA/OH*
$8.2M in current debt, $33.8M in long term debt.
Ayr plans to use it's strong operating and profitability metrics to gain favorable access to capital markets. Lenders LOVE positive cash flow and EBITDA w rapid topline growth. #SAFE
I fully expect more M&A announced very soon.
Ayr plans to use it's strong operating and profitability metrics to gain favorable access to capital markets. Lenders LOVE positive cash flow and EBITDA w rapid topline growth. #SAFE
I fully expect more M&A announced very soon.
Rough math fully diluted currently trading around:
4x 2020 revenue
Less than 2x 2021 revenue (kushdaddy estimate)
Less than 6x 2021 EBITDA (kushdaddy estimate)
The market is severely underestimating incremental growth from acquired PA/OH assets.
4x 2020 revenue
Less than 2x 2021 revenue (kushdaddy estimate)
Less than 6x 2021 EBITDA (kushdaddy estimate)
The market is severely underestimating incremental growth from acquired PA/OH assets.
Looking forward:
Q3 should see a nice bump from resumption of record Mass. sales after Q2 halt. NV business continues to outperform. PA and OH revenue will start to scale quickly into Q1 2021.
Now Ayr will look for new key markets (think AZ, NJ, IL, MI, NY) to expand and execute
Q3 should see a nice bump from resumption of record Mass. sales after Q2 halt. NV business continues to outperform. PA and OH revenue will start to scale quickly into Q1 2021.
Now Ayr will look for new key markets (think AZ, NJ, IL, MI, NY) to expand and execute
Putting your capital behind a management team like this how you compound wealth over time. Ayr is strategically positioned to ramp up growth NOW after making the right early strategic moves.
$AYRSF fair value is north of $25 considering new assets and growth trajectory.
$AYRSF fair value is north of $25 considering new assets and growth trajectory.
Disclosure: Very long
COO Jennifer Drake impresses more each virtual conference I attend.
COO Jennifer Drake impresses more each virtual conference I attend.
